The Senate Agriculture Committee met Tuesday to approve the nomination of Tim Massad as chairman of the Commodity Futures Trading Commission, even as the agency fumbles over the definition of a “swap.”
When Massad testified at Senate hearings last month, he stated flatly that speculation can affect prices. Then, he hedged. “There are many, many factors that affect prices,” Massad added, “and sometimes it’s difficult to measure what the impact is of any particular factor.”
While he pledged to pass limits on the number of contracts that commodities speculators can hold, this hazy testimony reflects how little is really known about how the new CFTC chairman, if confirmed, will shape the derivatives market.
Massad’s hedging also reveals how difficult it is to pass reform. Of course, any official following in former Chairman Gary Gensler’s footsteps would seem restrained and even-keeled. Gensler seemed to delight in ramming through rules that made bankers cringe.
When compared to Gensler, Massad seems even more tepid. As a partner in the corporate finance group of Cravath, Swaine and Moore, Massad’s appointment has also raised questions about his ability to impose tough regulations. Other revolving-door public servants have also been suspected of continued private-sector loyalty.